Advice: selling MC, payment plan, title, things to be careful of

RRrider

RRrider

Enthusiast, Fukrwe Club
I'm selling a bike to a friend, who needs to pay as a downpayment and a couple of installments, vs. all cash upfront. Following the credo that if you do business with a friend, it is best to spell everything out in writing, to avoid misunderstandings later which can hurt the friendship, I'm wondering if BARF has any advice for me?

In particular, I'm wondering about:
* the title: when to transfer? if right away, how to transfer with a lien?
* any key clauses that should be in the written agreement to ensure nothing blows back on my with the DMV or Insurance companies, should something unfortunate happen with my friend after he has possession of the bike?
* Anything else I should be thinking of?

TIA for the education and help :thumbup
 
Smash Allen

Smash Allen

Banned
I'm sure others will chime in with specific wording for the contract.

Have you thought about the value of your friendship? What happens if he deadbeats on payments? Would you regret selling the bike if you lose the friend that you were trying to help?
 
dravnx

dravnx

Well-known member
Don't do it. Let your friend save up the money and then pay cash. Having a contract will only make things easier if you have to file a civil lawsuit. It guarantees nothing. And winning a lawsuit and collecting on a judgement are two entirely different things. The only thing that can protect you from a liability lawsuit is the DMV release of liability and that's not guaranteed either. I'm not an attorney but I did stay at a Holiday Inn once.
 
NB0tt

NB0tt

Well-known member
Make sure he has full comp/collision insurance on it with proof? Just don't do it?
 
byke

byke

Well-known member
Depends how important the value of the bike is to you. For example, I'll lend a friend twenty bucks because it's an inexpensive way to find out how trustworthy that person is. If they suck at paying it back, or never pay it back, I'm happy to learn that without serious fiscal pain. Like riding without a helmet, never engage an activity like this if you're not okay with the worst possible outcome. If you're cool with it, you keep the title and one key until it's paid in full, pretty standard.
 
Honey Badger

Honey Badger

...iz a girl
Okay, when I was in a tight spot a couple+ years ago (after a divorce that put me in a rather negative place financially), I actually ended up doing something like this.

While it's NOT something I would recommend doing, on the flip side of that, I've had to be that other person. Since I know I'm stand up, bike is now clearly titled and owned by me, but at the time, there was no way I was going to manage to take out a loan as no lender would look at me, especially on a sport bike.

If you'd like some of the details of my experience, I'd be happy to discuss via PM, just shoot me one and I can send you examples of the paperwork we did (had it notarized as well), agreements reached, etc.
 
splat

splat

Well-known member
Cookie Monster said:
Make him take out a loan instead of treating you as the bank.
Click to expand...


This is your answer.

Anything else is dumb on your part.

Don't take a down payment, what happens if he get into financial trouble and needs that money back? Even if you say it's non-refundable.

Don't take payments, what happens if he wrecks it?

Don't take payments, what happens if YOU wreck it?

Tell him he can contact his bank, but it's in YOUR best interest to outright sell it either to him or to someone who can pay in full.

As stated above, you are jeopardizing your friendship so weigh it carefully.
 
Alan_Hepburn

Alan_Hepburn

Well-known member
I agree with those who say "Don't do it" - but if you do, the title is handled just like any other installment sale: you become the lien-holder, or legal owner, on the title and he is the registered owner. And make DAMN sure that he has full insurance to protect YOUR interest in the bike should he wreck it, or lose it.
 
auntiebling

auntiebling

megalomaniacal troglodyte
Staff member
Unless I was ok with the possibility of losing the entire sum*, i'd keep the money AND the bike in my posession. Your friend can hang on to the pinknslip, unsigned.

*I financed a good friend on a cheap bike once. Probably should have just given it to him.
 
speedster

speedster

Well-known member
Unless he's a very good friend, and that friendship is worth more than the value of the loan, it's best NOT to do it, as quite often you'll end up losing both.
 
sckego

sckego

doesn't like crashing
I would just not transfer the title OR the motorcycle until the final payment is made. Keep all the payments separate from your own accounts and if anything should happen to the bike, or if either of you decide to cancel the transaction, he gets all his money refunded. Once you have all the payments, title gets signed and he gets the keys.
 
mototireguy

mototireguy

Moto Tire Veteran
Don't do it.

If you do it then...

You become the lien holder (bank) and buyer becomes the registered owner.

Buyer needs to have FULL comp/collision insurance coverage.

Downsides; Buyer cancels full coverage or skips on insurance. Will you know, will you repossess the motorcycle? Buyer plays the excuses game on timely payments. Do you repossess the motorcycle? Contracts are great. Enforcing out of compliance contracts and going to court sucks.
 
raymond_h2002

raymond_h2002

Well-known member
Kinda depends on how deep your pockets are. Let's say the bike gets totaled the next day and he loses the ability to pay you back. Would you be financially hurt, or just mildly annoyed?

Even if you spell everything out and account for all scenarios, it still doesn't guarantee saving the friendship completely. If the friend loses the ability to pay you, you may be ok with it, but its possible that they may distance themselves from you out of guilt/shame.
 
Strigoi

Strigoi

Banned
Don't do.

I've done it before, but it was also with someone that I've been friends with for a long time. It was only a $1000 bike and we made an agreement that he'd give me $100 a month on it. It worked out and I wasn't worried about being out the money if something happened. I only know a few people that I'd do something like that for, but only for an amount where I don't mind if I don't get it back.
 
Smash Allen

Smash Allen

Banned
raymond_h2002 said:
Kinda depends on how deep your pockets are. Let's say the bike gets totaled the next day and he loses the ability to pay you back. Would you be financially hurt, or just mildly annoyed?

Even if you spell everything out and account for all scenarios, it still doesn't guarantee saving the friendship completely. If the friend loses the ability to pay you, you may be ok with it, but its possible that they may distance themselves from you out of guilt/shame.
Click to expand...

I had to do a triple check, I thought you were OP replying to yourself:laughing

Your avatars are strikingly similar. Same turn, same color leathers, same color bike
 
M

motomania2007

TC/MSF/CMSP/ Instructor
I have done this in the past.

It is bound to cause hard feelings and get in the way the friendship.

My suggestion is to not do it.

If you don't want to do it that way and you really want to sell your motorcycle to your friend realize that there likely not to be your friend at the end.

I suggest tell your friend to go get money from a credit card or similar line of credit and buy the bike from you with the cash he gets from the credit card.

Then he can worry about paying the credit card back however he chooses to do so.

If you're intent on going through with this and being the banker for this guy, then here's how you do it:

You take the down payment, and at the same time you have the buyer purchased full coverage insurance for the motorcycle naming you as the owner and both of you as the riders. If you have to deduct that from the down payment so be it.

You have a contract with him that says the motorcycle is yours. The title remains in your name, until such time as the full purchase price is paid.

At that time you will transfer title to him but not before.

You need to also hold a key to the bike.

The agreement needs to say that the motorcycle remains in your name and you have the ability to take it at any time up until full payment has been made.

Even with all this you probably can ever lose a friend in the process.

It just usually doesn't go well but good luck with it.
 
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